Washington Mutual
Dead1889–2008
| Industry | Finance |
| Headquarters | Seattle, WA |
| Founded | 1889 |
| Died | 2008 |
| Peak employees | 49,000 |
| Peak revenue | $11.6B (2006) |
| Cause of death | Financial crisis |
Washington Mutual — WaMu to its customers — styled itself as the anti-bank. Friendly tellers, free checking, no-suit culture. CEO Kerry Killinger positioned WaMu as the Walmart of banking, expanding aggressively into subprime and option-ARM mortgages. 'The Power of Yes' was the tagline. WaMu said yes to everybody.
The mortgages WaMu approved were designed to fail. Option-ARM loans let borrowers pay less than the interest owed, meaning the loan balance grew over time. WaMu's own internal reports showed fraud rates of 58-83% on some loan categories. Management ignored them.
When the housing market collapsed, WaMu's loan portfolio imploded. Customers withdrew $16.7 billion in deposits in 10 days — a bank run in slow motion. On September 25, 2008, the Office of Thrift Supervision seized WaMu and sold its banking operations to JPMorgan Chase for $1.9 billion. It was the largest bank failure in American history by a factor of ten.
Timeline
Founded in Seattle to serve victims of the Great Seattle Fire
Begins aggressive expansion through acquisitions
Acquires Providian Financial; pushes deeper into subprime
Peak revenue; holds $307 billion in assets
Customers withdraw $16.7 billion in 10 days
Seized by OTS on September 25; sold to JPMorgan Chase for $1.9 billion